This Canadian trial will be a pivotal protocol study, conducted as a randomized, controlled trial. A total of 80 subjects, 40 subjects in each of the two groups (BST-CarGel applied to a microfractured lesion or microfracture alone), will be enrolled in this study. The subjects and investigative medical staff will not be blinded to treatment due to the difference in surgical incision size. However, although the treatment will not be blinded, the primary effectiveness assessment will be blinded. The primary endpoint of this study will be cartilage repair at 12 months proved by demonstrating that BST-CarGel treatment effectively fills cartilage lesions with high quality cartilaginous tissue. The secondary endpoints will be pain, stiffness and function while other tertiary endpoints will include safety, quality-of-life (QOL), as well as macroscopic characterizations of tissue repair. The primary measure of this study will occur at 12 months, when imaging of repair tissue using magnetic resonance (MR) and associated analyses will compare tissue volume, quality and other anatomical variables. Radiographic evaluations will be blinded. Volunteer biopsies at 13 months may be obtained. Pain, stiffness, function and QOL will be assessed prior to treatment, and at 3, 6 and 12 months following treatment using self-administered validated scores (WOMAC and SF-36). In addition, subject safety will be assessed through a record of adverse events.